Alternative Dispute Resolution – ADR – is being used more and more to resolve even the most complex disputes. It’s used to deal with disagreements between private individuals as well as in commercial disputes. ADR can range from informal discussions between lawyers that lead to an agreement to more formal hearings in front of a panel of arbitrators. In its 2021 audit the UK Centre for Effective Dispute Resolution (the CEDR) estimated that there were 38% more mediation cases being handled in the UK in 2020 compared to 2018. This trend has implications for the Bahamas too where as we’ll see there’s a big push to promote ADR.
At ParrisWhittaker our award-winning lawyers provide expert advice to businesses and individuals. We’re always focused on providing a service that offers the best value, and our use of all available ADR techniques helps us do this in appropriate cases. We’re available on 1-242-352-6110 and 1-242-352-6112 or you can always contact us online.
How NOT to approach ADR
Almost 30 years ago the Harvard Business Review examined why the much vaunted new ADR techniques had not delivered what they had promised in the 1980s. Then ADR was heralded as a cost-effective way to keep individuals and organisations out of court and away from the kind of litigation that can have as negative an impact on the victor as well as the loser.
The Review found that the way ADR was being practiced meant that it was simply replicating the litigation it was designed to prevent. So, an arbitration or a mediation might become bogged down in multiple motions, overly extensive discovery, too many expert witnesses and unreasonable awards. Parties were also publicising proceedings that should really have been kept private.
In our experience the Review’s findings still ring true today. Many businesses might pay lip service to ADR but in practice not really believe in it as an effective mechanism to resolve disputes. Unless business owners commit to fostering an ethos internally that ADR is a valuable tool, and not a second-best option behind court litigation, organisations are unlikely to see the real benefits of ADR. Those that commit to ADR and learn how to approach it are the ones that benefit most.
ADR: The Future?
In the UK there’s a real impetus behind ADR and its suitability for resolving all kinds of commercial dispute. Compulsory ADR is even on the agenda for some types of dispute. Here in the Bahamas forcing people to engage in ADR may not be on the table but promotion of ADR is high on the government’s priority list. In 2020 the Trade and Industry Minister made clear that promoting an alternative dispute resolution regime is one of his ministry’s highest priorities. It seems the ultimate goal is to position the Bahamas as a centre for international commercial arbitration and ADR in general.
One of the main drivers of the government’s initiative is the belief that ADR expands access to legal remedies for individuals locally as well as businesses. For businesses in particular ADR has the advantage of encouraging the resolution of disputes while maintaining healthy, long lasting business relationships. This, according to the Minister, is largely down to the fact that ADR processes are often less adversarial and cheaper than traditional court proceedings.
With Turks and Caicos introducing mediation rules and considering a revamp of its arbitration framework it’s clear that ADR is something that businesses across the Caribbean and elsewhere should consider embracing. While fostering the right mindset within an organisation to ensure ADR is understood and utilised effectively may take time, a failure to get to grips with ADR techniques now is something that could end up costing you in the long run.
A good test of an organisation’s attitude to ADR is to consider whether it would still use arbitration, mediation or another form of ADR when their case was so strong that their chances of losing in a court trial were negligible.
Finally it’s also worth highlighting that ADR isn’t suitable just for minor, less complex disputes. Businesses need to consider ADR when faced with even the most complex, high value disputes. It could be the easiest way to bring a damaging dispute to a satisfactory conclusion.